Shares of Samsung rose 0.8 per cent to 1,308,000 won in Seoul on Wednesday.
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Separately, the company said it plans to buy back up to $10 billion in stock as it looks to return 30 percent to 50 percent of its free cash flow to shareholders over the next three years.
‘Samsung believes that the current share price and the market value of Samsung Electronics are severely undervalued both in terms of the ability to generate earnings and also in terms of the underlying asset or equity value of the company, ‘ it said.
The world’s No. 1 memory chip and smartphone maker said third-quarter operating profit leapt 82 percent to 7.4 trillion won ($6.46 billion), compared with its guidance for 7.3 trillion won in early October and 4.1 trillion won a year earlier.
The announcement saw Samsung Electronics shares jump 4.3 per cent in early morning trading.
Samsung posted its third-quarter earnings today, revealing that – as it predicted earlier this month – the company is back to operating profit growth after seven quarters of decline. In the first phase, which begins Friday for three months, Samsung said it would buy about 4.2 trillion won of shares. It had 51 trillion won of net cash at the end of 2014, or about two-year worth of its capital expenditure.
Operating profit in the semiconductor business surged to a quarterly record of 3.6 trillion won, up 60 percent from a year ago.
For 2016, Samsung said it expects its smartphone growth rate to slow compared to prior years.
The higher sales came largely from strong demand for Samsung’s chips and flat-panel displays, which account for more than a third of its total business, while profits were helped by the weak Korean won.
The mobile unit will focus on maintaining a profit level similar to the previous quarter by expanding sales for each price segment that were introduced in the third quarter, and by continuously improving cost efficiency, the company said.
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